First Guardian CIO Simon Selimaj moved $500,000 from frozen fund to son
Simon Selimaj now lives with his mother, with the entirety of his assets consisting of three paintings and a single listed equity holding, the Federal Court heard.
Falcon Capital director Simon Selimaj transferred $500,000 from First Guardian to his son days after freezing orders were imposed on the fund, the Federal Court has heard.
Mr Selimaj, under investigation as part of the corporate regulator’s broader probe into the First Guardian Master Fund and its responsible entity Falcon Capital, made the transfer on March 7, after Falcon and First Guardian’s assets were frozen in late February.
Four days later, Mr Selimaj submitted to ASIC a statement of Falcon’s assets and liabilities, the regulator’s legal counsel said in a Federal Court hearing on Thursday. The court also heard Mr Selimaj, an investment professional with decades of experience at top investing houses including Brown Brothers Harriman, The Trust Company and Colonial Mutual, lives with his mother and has just $200,000 of assets consisting of three paintings and a single $18,000 equity position in a listed company.
Mr Selimaj’s explanation for moving the First Guardian money into his son’s account included that it was proceeds of a personal investment, but no further evidence of this investment was supplied, ASIC said in court.
Revelations of the transfer come weeks after liquidators for the First Guardian Master Fund, which collapsed earlier this year, revealed a $500,000 Lamborghini Urus, paid for by Falcon Capital, had been found in Mr Selimaj’s possession. It has since been seized by liquidators and auctioned.
In court on Thursday, the corporate regulator sought to have a receiver appointed to Mr Selimaj’s property, but lawyers for Mr Selimaj argued against this and also called for the freezing and travel restraint orders imposed on him since June be removed.
“There is no evidentiary basis, or sufficient evidentiary basis, for the making of such an order (in terms of travel restraint, freezing orders and receivers),” counsel for Mr Selimaj said.
The court later heard First Guardian director David Anderson had pressured Mr Selimaj to transfer $US500,000 to Dubai, according to a written statement submitted by Mr Selimaj.
Mr Selimaj instead transferred two lots of $US80,000.
“From the 60,000 documents that ASIC’s reviewed, they may have a claim in relation to two lots of $US80,000, which is the type of transaction you would expect to see liquidators investigating in ordinary liquidations,” Mr Selimaj’s legal counsel said when arguing against the appointment of receivers.
The First Guardian fund was put into liquidation in April, putting 6000 investors at risk of losing up to $450m their in superannuation savings.
Many of the investors were cold called by lead generators who would then put them through to a financial adviser. The adviser would then convince them to leave their established super fund and move to a retail fund where their savings were put into First Guardian.
An investigation by The Australian found, in some instances, investors were put into the fund without their knowledge or consent.
The liquidators’ initial report, released last month, warned investors may lose most of their savings.
While advisers funnelled new investors into the now-failed strategy with false promises of high returns in liquid assets, virtually all of the money went to illiquid investments and loans to related parties, according to ASIC and the liquidators.
First Guardian paid the advisers and lead generators tens of millions of dollars to put clients into the fund, it is alleged.
At least $69m of the fund’s money was invested or loaned to entities associated with Mr Anderson, while the 19 investments across its portfolio did not include any direct assets that are real property, backed with first-ranking mortgage security, the liquidators said.
At least three of the ventures the fund invested in are already insolvent.
Justice Moshinsky will on Friday hand down his decision on ASIC’s request for a receiver and Mr Selimaj’s lawyers’ request for the travel and restraint orders to be set aside.
